Analysis - Will Suntory Food & Beverage buy AG Barr next?

An analyst has questioned whether Suntory Food & Beverage will make AG Barr its next target after its deal to acquire GlaxoSmithKline's brands Ribena and Lucozade.

Suntory Food & Beverage announced today (9 September) it has agreed to pay GBP1.35bn (US$2.11) for the GlaxoSmithKline brands in a move that pre-empted an expected auction later this month. Barr had been named as a potential buyer in the auction, but Canaccord Genuity's Wayne Brown told just-drinks today the GSK deal should not be considered a missed opportunity for the Irn Bru owner.

“Instead of looking at it as a missed opportunity, I think it raises the prospect of further M&A opportunity in the UK soft drinks industry,” Brown said. “And instead of becoming an acquirer, is it possible that Suntory would have a more detailed look at AG Barr?”

Suntory Food & Beverage expanded its acquisition funds last month through an IPO on the Tokyo Stock Exchange that raised US$3.9bn. The company, which is the soft drinks & food unit of Suntory Holdings, has said it will use part of the money to buy overseas targets.

Ribena and Lucozade are Suntory Food & Beverage's first purchases since the IPO.

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